Date: 2016-05-05

Small and Medium Enterprises (SMEs) are critical to the economic development of any country as they have the potential to create employment opportunities, generate revenues, improve local technology and ensure forward integration with large-scale industries to ensure sustainable socio-economic development and prosperity.

SMEs contribute to economic growth in both developed and developing countries by sustaining employment and contributing to Gross Domestic Product (GDP). For instance, SMEs is said to be contributing over 70 per cent of Ghana's GDP.

However, there has been a gross under performance of SMEs in Nigeria, which has limited their contribution to the economic growth and development of the country. It is said that the contribution of SMEs to the national GDP of Nigeria is less for various reasons, ranging from inadequate infrastructural facilities, management skills, unfavourable government policies and low-level technology, among others.

But of all these challenges confronting SMEs in Nigeria, financing remains a critical factor. Many potential entrepreneurs lack access to capital to develop their ideas or flourish their businesses.

Worried by this ugly development, the Kwara State Governor, Alhaji Abdulfatah Ahmed in March, 2012 launched the Kwara Micro Credit Intervention Scheme to encourage and assist small and medium scale enterprises in the State. The scheme allows new and existing small businesses to bid for funds to establish or expand their businesses.

To kick start the scheme, the governor approved an initial sum of N250 million, which was domiciled in the State Ministry of Commerce and Cooperatives.

The objective of the scheme according to Governor Ahmed was to provide financial support to small business owners, who lack access to funds to flourish their businesses. This, he said would stimulate commerce, trade and economy at the local level in the State.

According to the Technical Adviser to the Governor on Small and Medium Enterprises Development, Mr. Olusegun Soewu, the state government had now spent about N1.597 billion on the micro credit intervention scheme since it began in 2012.

He also disclosed that a total of 1,848 cooperative societies have benefited from the scheme and the funding provided by the government has in no small measure assisted numerous members of these societies spread across the State to grow their businesses.

Soewu revealed that the sum of N16.3 million had so far been disbursed to about 52 cooperative societies since the beginning of year 2016. He said the disbursement is being done through selected micro finance banks that are based within the operating environment of the target beneficiaries.

The participating micro-finance banks are referred to as partnering banks. He listed the banks to include KCMB MFB, Omu-Aran MFB, Apeks MFB, Ilorin MFB, Balogun Fulani MFB, Heritage MFB, Magajin MFB, and Ibolo MFB. Others are Iyeru-Okin MFB, Iludun Oro MFB, Osi MFB, Stockcorp MFB, Sincere MFB and Brightway MFB

"Importantly, these banks through their staff have personal interactions with the target beneficiaries to determine the prospects their businesses or ideas. The banks are also in a better position to properly appraise and monitor the beneficiaries and ultimately recover such disbursed funds as at when due," he added.

According to him, the target beneficiaries of the scheme include men and women who have existing businesses, youth with workable business ideas or requisite skills, enterprising women in the rural areas and cooperative societies with traceable business records.

The Technical Adviser further stated that 53 associations under the aegis of Artisan Congress of Kwara State had benefited from the scheme, adding that about 150 taxis, 25 buses and 193 motorcycles had been given out to beneficiaries across the state.

He also added that over 160 farmers' associations across the State with not less than five farmers each had also benefitted from the micro-credit funding under the Off Taker Demand Driven Agriculture Scheme of the state government.

Speaking further on the funding scheme, Mr. Soewu said, "it is a purely developmental programme to ease economic activities, unlock hidden local economic potential and stimulate local economy as a first line catalyst to industrial growth as envisioned by Governor Ahmed."

He assured that the administration of Governor Ahmed would continue to promote the informal sector of the economy by providing credit funding for small enterprises and cooperative societies to stimulate commerce, trade and economy of the State.

Improving access to credit is crucial if SMEs are to reach their potential and allow businesses to move from start-ups to established businesses with growth potential. The SMEs sector, if properly developed has the capacity to contribute significantly to the economic advancement of a country.